Energizing the Indian Economy: Obstacles to Growth in the Indian Oil and Gas Sector and Strategies fro Reform

Abstract

India is rapidly becoming one of the largest consumers of energy in the world. At the same time, India continues to be hindered by bureaucratic delays, an archaic tax system, security problems and prohibitive investment regulations that have made expansion and consolidation in the petroleum sector difficult. This Note explores underlying structural problems in India’s investment, tax, and regulatory climate that have worked to the detriment of Indian oil and gas companies. This Note argues that corruption, problems associated with contractual stability, a restrictive investment climate, and security concerns have prevented meaningful mergers and acquisitions by Indian companies, prevented them from exploring oil and gas opportunities abroad, and have disadvantaged them with respect to their competitors in other countries. This Note further argues that despite India’s progress in liberalizing its economy, its government must work to address these core underlying problems in order to secure a stable and secure supply of energy to meet its growing demands.